Skip to main content

tv   The Kudlow Report  CNBC  March 21, 2013 7:00pm-8:00pm EDT

7:00 pm
we're making it. a talking car. but i'll tell you what impresses me. a talking train. this ge locomotive can tell you exactly where it is, what it's carrying, while using less fuel. delivering whatever the world needs, when it needs it. ♪ after all, what's the point of talking if you don't have something important to say? ♪ [ male announcer ] this is a reason to look twice. the stunning lexus es. get great values on your favorite lexus models during the command performance sales event. this is the pursuit of perfection.
7:01 pm
♪ [ male announcer ] help brazil reduce its overall reliance on foreign imports with the launch of the country's largest petrochemical operation. ♪ when emerson takes up the challenge, "it's never been done before" simply becomes consider it solved. emerson. ♪ emerson. try running four.ning a restaurant is hard, fortunately we've got ink. it gives us 5x the rewards on our internet, phone charges and cable, plus at office supply stores. rewards we put right back into our business. this is the only thing we've ever wanted to do
7:02 pm
and ink helps us do it. after after the bell, tip co-disappointing. should not impact qlik. sales, four for one split. there is always a bull market somewhere. i promise to find it here on "mad good evening, everyone, i'm larry kudlow. time running out on the tiny island of cyprus. it's the ultimate game of chicken. by the way, a new plan that works in taxing bank assets and even grabbing some money from the church. how about that. meanwhile, back here at home once again i'm going to stop this nonsense about a new national internet sales tax.
7:03 pm
my pal grover norquist will help me declare war on it. this is a big government tax grab that we will debate. >> speaking of taxes, guess who is not paying them? more and more federal workers are tax cheats. why shouldn't tax cheats just be fired? it's that easy on the "kudlow report." and we begin right now. first up tonight, the cyprus crisis continues. riots are forming in the streets. cnn's own chief international correspondent michelle caruso-cabrera is with us tonight. >> cyprus is going to do something that's called "resolving a bank." like all tough things in life, we use euphemisms. tonight the head of the central
7:04 pm
bank has asked parliament to give him permission to give him new powers of resolution authority. what he will do with that resolution authority is he will take cyprus's most troubled bank, he's going to take the good deposits in that bank and move them to another cyprus bank. the bad deposits, the bad loan, the junk that's in laiki bank will remain as a stub and those assets will be sold off over time. first, it's going to get them a lot claeser to the $5.8 billion they need to come up with. the other key point, people under 1 hundred,000,000 euros w completely protected. >> many thanks. what's next for cyprus?
7:05 pm
with us, dan greenhouse, gary shapiro joins us, author of "ninja innovation" and larry mcdonald, head of global strategy at new edge. he's got a totally different take on this cyprus story. you said, i read your article today, you believe cyprus will be solved this weekend, the banks will reopen next week. tell me why. >> they're holding all the cards, larry. in september, five years ago it was a game of chicken. it was the biggest game of chicken all time. when the u.s. government let lehman go, it made the aig bailout ten times more expensive. >> how does this apply to the eurozone? >> if you let cyprus go, germany and the eurozone has already
7:06 pm
invested 600 billion in greece, in portugal. it weakens those economies dramatically, weakens those countries. and it also weakens italy. >> you're saying potential contagion. finally, how does it get resolved? michelle is talking about a good bank/bad bank, nobody pays on deposits up to $100,000. the bailout is 10 billion euros from the european -- ecb. the bail-in is about $6 billion euros. so greece is looking for whatever they're looking for, $4 billion, $5 billion. or does europe bail that out even more? >> the biggest factor of all, dan and i were talking a couple minutes ago, the depositors above 100,000 will lose 40% to
7:07 pm
50%. >> those are russians. they're going to be pissed off. >> the great systemic problem of giant bank failures is somewhat eliminated by what they're putting forward now. >> what do you think, dan? does this work? >> for our viewers i don't think it matters. the specifics are super interesting, we're going to go have a drink. what matters to people at home, what matters to the larger story is we decided that people's property in banks was not their own. >> in europe or in the u.s., too? >> in europe only. >> they wouldn't pull that here. >> one never knows but, no, they would never put that here. whatever bank is -- >> terribly important, because it's an insured, guaranteed deposit. does that play into his hand? you're saying precisely for this reason they can't let this thing
7:08 pm
go down because then it will spread and the idea of confiscating property in italy and spain and greece and elsewhere and there will be a run on the banks in europe like we've never seen. are you two guys sort of integrating your analyses here? >> i guess deep down we agree. i'm saying it's a poker match, i think cyprus hold as lot more cards. the contagion is substantial. this week i've seen phenomenal warning signs, things that acted up right before lehman, right before june. those indicators are popping up. >> this is going to take church money, they're going to loot and raid pension fund money to do this. is it worth it? does anybody care about cyprus? >> we're only talking about 10
7:09 pm
billion euros or so. we borrow that and pay it back in three days. i agree, it the precedent here that's really important. will this be a precedent for europe and then will it be a precedent for the u.s.? are we going to start attacking those who have money in bank accounts in the u.s. in a few years when it gets tough for us? >> what happens if cyprus calls the bluff and it doesn't work? what happens if the cyprus banks fail and goes out of the eurozone or the cyprus currency leaves the economy? what happened? >> the cyprus currency would implode on itself. presumably the rest of the euro area would circle the wagons so to speak and say and do anything necessary to ensure that people don't think -- >> the ecb will do whatever it takes to avoid the run on the bank that you're talking about. that's basically the policy. >> that's generally -- >> i'm asking will the ecb do it
7:10 pm
for the cyprus banks. it's the same thing. will they at this moment, as i understand your point of view -- you guys are integrating -- the ecb and european union cannot afford to even take a risk of contagion from the failure of cyprus and their banks and leave the eurozone. they can't even take that risk, therefore they won't take that risk, therefore if cypresig cyp up with less money for the bail-in -- >> if you let all the banks in cyprus fail if they leave the eurozone, you have giant failures and liquidations, that's a huge risk. but if you do this plan that's on the tape that michelle just talked about, if you do this and then there's still a risk of above $100,000, that's a future contagion. in other words, the depositors above $100,000, that's more of a future risk. >> let's call it what it is. that's russian money laundering accounts.
7:11 pm
if you look at russian deposits and russian loans according to moody's, you could be talking about $70 billion worth. now that ain't chump change. you're saying russia will take that. they'll probably have to have a 25% tax on those deposits. >> if those deposits -- if those deposits get hit at a 40% clip, it will create a massive contagion over the next six months over the eurozone. i hope the russians fill that gap. >> $2.5 billion is nothing for russia. they could still go on the boards of these banks, still get rights to the natural gas. what i'm saying is what happened to russia in the last 24 hours? >> they have been -- i've heard so many different stories in terms of gas sales and even going after the pensions inside cyprus. so much the russians have been very mysterious, there's been several meetings behind the scenes. i've been blogging about this on my web site. nobody really knows what the
7:12 pm
russians are doing. >> the basic call is they're going to make a deal, the deal will be made this weekend and banks be open for business early next week. is that right? >> absolutely. i think the ecb will back down. >> great call. we'll have you back again on monday if you're right. larry mcdonald, very brave call. you guys are actually two sides of the same coin here. >> coming up, here's some federal tax cheats. more and more federal workers are dodging their obligations. they ought to be fired or maybe jailed. federal workers. we're going to talk about a new push to right this incredible wrong. and later on, this is a tax nobody should have to pay. they call it the marketplace fairness act but it's nothing more than a national internet sales tax grab that will boost government every with, completely screw small businesses. once again tonight we are going to slam thiss down. don't forget free market capitalism is the best path to prosperity. we need a dose of it here in the
7:13 pm
usa and boy do they need it over there in europe in cyprus, holy cow. i'm kudlow, we'll be right back. acceler-rental. at a hertz expressrent kiosk, you can rent a car without a reservation... and without a line. now that's a fast car. it's just another way you'll be traveling at the speed of hertz.
7:14 pm
[ laughter ] ♪ [ female announcer ] each one of us is our own boss. ♪ and no matter where you are in life, ask your financial professional how lincoln financial can help you take charge of your future. ♪ from the united states postal service a small jam maker can ship like a big business. just go online to pay, print and have your packages picked up for free. we'll do the rest. ♪
7:15 pm
call call it a warning to all federal employees, pay your taxes. more than 100,000 federal
7:16 pm
workers currently owe more than $1 billion in taxes. how about this, why don't we just fire these government workers. they're tax cheats. yesterday a house committee approved a bill that would do just that and it was sponsored by jason chfitz. jason couldn't make it. we have instead, honored to have grover norquist. this is not cyprus. this the united states federal workers cheating on their taxes. why shouldn't they be fired as congressman chafitz suggests. >> if you have an employee that owes you money, you should be able to dock their pay. if it's food stamps, they should make you volunteer, if you work for them, they should be able to dock your pay until that debt is paid. >> grover, should their pay be docked or should they be fired
7:17 pm
outright? >> the legislation says if the government goes to attach their earnings, if they're not paying up, then they can be let go. i mean, what -- i talked to chaffetz, this happened about five, six years ago and we discovered the irs specifically had a bigger problem than other federal employees, more irs agents were not paying their taxes owed a lot of money to the federal government, even other federal workers. they said we're going to fire you if you have don't get better. they've gone down to about 1% having this problem instead of 4%. so we've done this before. we ought to do it for all federal workers. it worked for the irs. >> how much time would you give them to pony up? >> i think it's like an employer having -- it depends how much you value the employee. >> you can value the employee but if the employee is a tax cheat, what's up with that? you can't value someone who is a damn cheater.
7:18 pm
>> well, there's a cheat and they can be contesting what they owe they the government. they could be -- >> 312,000 workers tax cheats this year, last year 279,000. this problem is getting worse, not better. >> i think we're focusing on the wrong part of this. i think the larger story here is perhaps the tax code is so annoyingly complex that the average person with above average intelligence can't do their taxes in a timely and correct fashion. >> you really believe that? this is growing. irs has very punitive penalties. it's an interesting point. you believe the complexity of the tax code should be blamed, not these individuals? >> do i think people would cheat less on their taxes if they thought they would be fired upon being caught? the answer is certainly yes. but the larger point about the complexity of the tax code still holds. timothy geithner, the treasure
7:19 pm
secretary, screwed up his taxes. >> he at least apologized. >> the average governor employee gets a w-2 form. i can't imagine how many of them have that money to cheat with, mostly paid under 100,000 with a w-2. >> grover, dan is willing to let them off because the tax code is too complex. that's what he said. >> not what i said. >> that's a very humane position. do you buy it? >> look, no. what they're talking about is after you've gone through appeals and everything, you still owe them money and you're not paying it back. when the irs told their agents and their guys we're going to let you go if you don't pay up, the number dropped by almost -- to one-fifth the size of the problem. let's do that to other people. president obama gave a big
7:20 pm
speech about how they were going to go after government contractors. they have about a $6 billion problem. we give government contractors money, they don't pay their taxes. we ought to say one of the conditions of getting the money is you pay your taxes. we know from the irs that you drop the problem to one-fifth its size if you say once you're told you have to pay, you we need to make arrangements or we let you go. >> do you think these federal workers let you get off too easy? they use excuses like dan tried to do. it's a very interesting thing. they get off too easy. >> i think most of them are well meaning, they want to do a good job and i don't know how there could be this many. >> because they're not so well manning. >> before you hire somebody, you should be able to find out if they owe money. >> that's part of the chaffetz
7:21 pm
bill. >> i'd like to see an analysis of how much they owe and not just the total but how much the individual owes. >> the average is 10,000 per guy for that $100,000. it's not small amounts. >> we got a billion dollars here at stake. every billion dollar counts. plus the federal workforce has grown too large in recent years. grover, thanks, buddy. you're going to come back in a couple minutes, we got even bigger fish to fry. left wing, touchy feely sensitivity goes wild at one massachusetts school. wait until you hear what one principal is doing just to make sure nobody ever feels bad. that story coming up next.
7:22 pm
7:23 pm
license and registration please. what's this? uhh, it's my geico insurance id card, sir. it's digital, uh, pretty cool right? maybe. you know why i pulled you over today? because i'm a pig driving a convertible? tail light's out.. fix it. digital insurance id cards. just a click away with the geico mobile app.
7:24 pm
. here comes . here comes app outrageous story. the principal at ipswich middle school in massachusetts cancelled honors night. you know why? he doesn't want to hurt the feelings of the students who didn't get good enough grades. it's not just this school. this wussification of america is exactly what we don't need. i want warriors, i want winners, i want competitors, i don't want people who are just little cry babies. let's talk about this with our panel. you know what they do? they give them ritalin now. instead of having little boys
7:25 pm
who are supposed to be little boys and competitors, they feminize them, they give them ritalin. this is the totally wrong direction. you have to learn to lose. that's my point. you have to learn to lose in life. do you not? did you lose when you were a kid? did you lose sometimes? >> you only learn when you lose. we're the only culture in the world that rewards losing in the sense that you're not osified from society. that's what makes businesses great. the entrepreneurs in silicon valley, they all failed. the job of any parent is to let your kid fail. it goes against everything you want as parent but what this principal is doing is fundamentally morally wrong. >> there are winners and loses are in life. why don't you learn this in grade school? >> as someone who has taken ritalin as a child and i'm clinically diagnosed with add,
7:26 pm
there is nothing feminine about having a child that needs ritalin. >> there's a lot of stories, you read all these stories but these young kids that display the kind of characteristic that young boys have, they're like little warriors, sometimes like little criminals on the playground, that's the way young boys are. i can't speak for the women. it's not just ritalin. sometimes ritalin has a point. but people are overdosing on this point. they want everybody to mellow out. where are the warriors, where are the competitors? that's what i'm asking. i had no idea. i didn't mean to disrespect you. >> there are people out there who probably have kids that have adhd. >> it's the generic point that i make. >> it is also overprescribed. >> we're not getting into this, i'm not on the ama. i went to high school with a kid named brad kata. i always wanted to be better
7:27 pm
than him. i never got there. but that's the essence of capital, you strive to do better. if someone is not held up to the goal to achieve, i don't know what you're doing here. >> kids didn't make the honor role. based on what dan is saying, they will fight harder to make the honor roll. if they cancel the night, there's no reward. in other words, is this country losing the idea of rewards and penalties? incentives. are we trying to make everybody level as some form of redistribution or will we reward excellence? >> we are struggling because some of them are pushing in that direction, it's the soccer teams that don't keep scores, it's the parents which are arguing with teachers all the time about the kids' grade when is they really should be letting the kids fail. >> do little boys get the brunt of this? i'm going to just ask you your
7:28 pm
opinion. is this the feminization of young men? >> i view it more as the socialization of america. everyone has to be equal. but we're not all equal. we are different. we have equal opportunity. that's what we should be talking about. >> i'm going to leave it there. >> now, a heated debate over a new internet sales tax that is nothing but a tax grab. it's a massive new government bureaucracy and i think it's another blow against small business. we are bringing back grover norquist to show gary shapiro why this is really a dumb idea. stay with us. gary shapiro is going to lift weights during this segment to get ready.
7:29 pm
today is gonna be an important day for us. you ready? we wanna be our brother's keeper. what's number two we wanna do? bring it up to 90 decatherms. how bout ya, joe? let's go ahead and bring it online. attention on site, attention on site. now starting unit nine. some of the world's cleanest gas turbines are now powering some of america's biggest cities. siemens. answers. ...amelia... neil and buzz: for teaching us that you can't create the future... by clinging to the past. and with that: you're history. instead of looking behind... delta is looking beyond.
7:30 pm
80 thousand of us investing billions... in everything from the best experiences below... to the finest comforts above. we're not simply saluting history... we're making it. barrow island has got rare kangaroos. ♪ chevron has been developing energy here for decades. we need to protect their environment. we have a strict quarantine system to protect the integrity of the environment. forty years on, it's still a class-a nature reserve. it's our job to look after them.'s my job to look after it. ♪
7:31 pm
welcome back to "the kudlow report." i'm larry kudlow. stocks may have dropped today but we've still got even more good news on the economy. now does that mean bern bernanke is going take his foot off the gas pedal sooner rather than later? that might be what's rather bothering stock investors. and where is the new jack kemp now that we need him? a republican who related to everyone with an optimistic but simple message of economic growth for all, we will ask
7:32 pm
lar larry sabateau in just a few minutes. >> a tax is a tax is a tax. if you tax something more, you get less of it. piling on new taxes is always bad for economic growth period. and yet out of washington comes yet another proposal for another tax. this one known as the marketplace fairness act but it is just a national internet sales tax. could even hit your itunes downloads later on. last night here on "the kudlow report," republican senator kelly ayotte spoke out against this bill. take a listen. >> i think we need to rename this legislative proposal for what it is because what it is is it's the internet tax collection act. for those who believe that this is some kind of conservative bill, this isn't my idea of conservative. this is not about small
7:33 pm
government, this is about forcing businesses in states like mine with no sales tax to become the tax collectors for the nation. >> there you go. well said, senator. i say this is a big government, unprecedented power grab. it's paving the way, by the way, to a national sales tax. i truly believe that. but let's talk with our guests. back with us, grover norquist and gary shapiro, who is among the bill's supporters. i begin with you. >> first of all, let me correct what you said. it is not a new tax. this is not even a tax. this tax is owed by every american. >> this is a mandate by the tax to have all interstate mandates paid. the interstate bothers me, too. >> if it's unconstitutional, it is unconstitutional. i don't think it is. when you buy something in new york or new jersey, you as
7:34 pm
consumer on the internet are obligated to report to the state the tax that should be paid. >> in the state. >> in the state you're in. >> all right. >> the truth is most americans are not doing that. >> but this is not what that's doing. this is going out of states. this is crossing states, is it not, grover? >> all politicians fantasize about the idea of having a tax where they can take money from people who don't get to vote against them. the whole point of this, new york could collect taxes, use taxes from people who live in new york. they don't want to do that. this whole thing is to allow politicians to say we're going to have california businesses pay taxes to new york and we can be as vicious and as tough on them as we want, they don't get to vote against us. it's allowing high tax states that are failed states to reach in to successful states and tax businesses there.
7:35 pm
these states drive businesses, high tech businesses out of their states and they want to be able to reach back in and tax them. the advocates of this say it will raise $23 billion in taxes. i get a kick out of the people who say it's not a tax increase but we're going to get $23 billion in higher taxes once we pass it. >> i mean, gary, this is a tax grab pure and simple. >> it is not. >> it also will lead to a massive new government bureaucracy to keep of this stuff. the states will get money. this is just a huge grab towards -- >> if it was a tax grab, then all the republican governors who signed grover's pledge would not be supporting it and most of them do. a bunch of conservatives support it because it is simply a way of collecting a tax which is already owed. it's a more efficient way than asking every american except for the -- those that live in the five states that have no sales tax to have to file reports with their state's government, which
7:36 pm
today's law. the next supreme court justice nominee is certainly going to be asked did you pay your sales tax on your internet purchases. and the answer is likely to be no. this will be the equivalent of the old nanny taxes. this is an efficient way of collecting taxes owed. plus let's face it, state governments have a lot of expenses. they have police, firemen and they have to pay for them. >> by taxing? >> it's not fair to compete with brick and mortar retailers. they have to pay it. >> it took a little while but we finally smoked it out. he wants the state to have more revenue for spending. i want you to follow up, grover on what he's saying. is it true all these republican governors really want this? >> well, no. some governors want higher taxes that other people will pay. they'd love to have the federal government pass a law that gave them money and they'd go, oh, look, i don't have any fingerprints on this tax increase. if they wanted to steal this money themselves from their own
7:37 pm
citizens, they could do that yesterday. this is all a big goldberg contraption to get money out of other people's pockets, businesses, that can't vote against you and you say i didn't do this, it just happened. but they claim it's a $23 billion tax increase on the american people. we ought not to be taxing internet sales. we we all the to say if you do business in a state, you should be taxed. if you don't live there, you shouldn't be taxed. >> you're primarily large companies? >> 80% smaller companies, 2,000 technology companies. >> then you need to go back because small business hates this. small business is now going to have to pay taxes when they go overs transom from state to state. they're going to have to set up whole departments which they cannot afford in order to do the record keeping. >> that's not true. >>, eric eriksson has done some great research on this. >> mom and pop retailers want to
7:38 pm
see this because they can't compete with internet retailers that have an unfair 5% to 10% advantage and they're not paying tax they don't have the cost of the brick and mortar and hiring local employees. if we want to see empty malls -- >> why do they want to be tax collectors? >> because those internet retailers are using the roads and the traffic and the firemen and policemen and getting protection -- >> that's a big government argument. i'll give you the last word, grover. >> larry, i served on a commission that looked at this more than ten years ago and we voted overwhelmingly not to tax the internet because the so-called fairness argument was nonsense. the cost of shipping way outweighs the difference in taxes. by the way, states should compete to provide the best government at the lowest cost. if you don't like sales tax in your state and you're a brick and mortar guy, then call your state legislator and call your
7:39 pm
governor and tell them to cut taxes. don't tell them to tax other people. we need competition nap will keep government efficient in all 57 states. >> 57 states? is that a freudian slip? >> that's what obama said, i visited all 57 states. okay, we got that cleared up. now time for some good news on the economy, some truly good news. i've got it for you in spades when we come right back. at tyco integrated security, we consider ourselves business optimizers.
7:40 pm
how? by building custom security solutions that integrate video, access control, fire and intrusion protection. all backed up with world-class monitoring centers,
7:41 pm
thousands of qualified technicians, and a personal passion to help protect your business. when your business is optimized like that, there's no stopping you. we are tyco integrated security. and we are sharper.
7:42 pm
at a hertz expressrent kiosk, you can rent a car without a reservation... and without a line. now that's a fast car. it's just another way you'll be traveling at the speed of hertz. improving the economy with stronger payrolls could lead to a decline in fed bond buying. maybe that $85 billion a month will move down to something lower so long as the economy keeps looking better. i want to bring it down to a kudlow own onne-on-one. particularly we've had a nice move down to unemployment claims, 340,000 i think on the four-week average. this bodes very well for the next month's jobs reports. existing home sales.
7:43 pm
this is part of the housing recovery. we talked about construction and we talked about housing starts. here's your existing home sales. can you see after a little slump a year ago, there thing is doing very, very well. there's no sign of any breakdown in the housing improvement. finally, one of my favorite indicators that i think is still underrated, the index of leading indicators, this thing was dipping down here, in the middle of 2012 we had that stall in the economy and now it is moving up, along with a whole lot of other indicators. so i think this is for real and i think it may affect fed policy. we're going to bring back our ace investors and i've got two questions. we're going to try to do two things tonight. are stocks correcting on the way to another bull run. that's the first question. and, second, has ben bernanke gotten the story right, market monitorists say yes the subject of my column out this evening, it's on and i want to thank joe
7:44 pm
wheezenthal. he wrote a long column by my column and it was accurate about what i said. thank you. we want to bring in our panel. still with us is dan greenhaus. why did the market get slammed today? we've had some bumps now. is this because of the oracle earnings, because of cyprus? >> i think investors are worried about the possibility of global growth slowing. fedex came out and missed and guided down later that day, oracle same thing. when you tie those kind of weakness, the companies have big global footprints with the decline in copper, i think investors are a little nervous this bernanke bubble-wrapped economy is at risk.
7:45 pm
>> what's changed? >> nothing's really changed. over the last couple of months, since november or so, we've had a terrific rally in the stock market, internal indicators are suggesting things might be stretched in the next month or two and cyprus came along just at the right time. what matters is profits and the u.s. economy and both of those seem to be doing okay enough to warrant higher prices. >> federal reserve funds, which ends through the first quarter, i believe, after tax profits up about 11% year on year. we'll get new updated numbers. i'm saying profits are the mother's milk of stocks, abigail. i've tried to teach you that since you became a regular on the show. when will you acknowledge that truth? >> you have taught me well and i acknowledge that. you're absolutely right. the corporate outlook on the s&p doubled since 2009 to now.
7:46 pm
so it's true. the s&p is being driven up by corporate profit. >> but when you great slam from oracle, which is big, when you great slam from fedex, i get that. i'm just saying would you buy the market from the correction. that's really what i want to know. >> i this i ththat this correct has just gotten started. i think the s&p is going to follow copper. copper is down 10%. >> from china. can i insert that? from china. china is knocking down copper. >> it's interesting you're talking about china. the shanghai composite is somewhat in correction territory. it's had a little rebound this week. we're seeing these little bouts nervousness. investors don't completely trust this bernanke bull market. >> a recovery in housing is good for commodities and housing and jobs. >> i will give you that. >> that was hard.
7:47 pm
i want to get my pal jimmy in. i acknowledge there's a case to be made. i read scott grannis last night, these are smart people. maybe bernanke has gotten it more right than i have been willing to admit in this sense. because of risk aversion after the meltdown, jimmy, everybody wants to hold cash and bernanke has basically supplied the cash. it has not caused the inflation that some people like myself and others thought it would. does that make sense? does that help describe this market monitorism that bernanke has done it rather more right than wrong? >> i think bernanke has had some good days and some good years and he's had some bad years. i think 2008 was a very bad year
7:48 pm
for ben bernanke. 2009 when he decided to take all these extraordinary measures and on to the first qe, that was great. second qe not so much. but i think now with the most recent round of bond buying, in which they're putting thresholds out there, communicating and putting out less discretionaries, i think that's good ideas. i think it's what milton friedman would be advocating, bond buying. >> i said this in the piece. this is a return to milton friedman monitorism. i was trained as a monitorist bit great call brenner. i did my undergrad at the university of rochester, which is was a monitorist. i didn't get all that keynesian stuff until i went to princeton later on and i've tried to outgrow that ever since. market monitorists want the fed
7:49 pm
to target nominal gdp, they understand the turnover of money is sinking. they want the fed to get us 5% nominal gdp, not 3.5% to 4. is that fair? i want to credit them with what's due. >> what most market monitors with would say is what they want to target is the trajectory of nominal gdp. let's say you're shooting for 5% a year. so if one year it's 3%, maybe the following year you'd want to make it 7% to get it back on that path. >> i'm not so sure i buy into that. i'm not sure i buy into that. dan, weigh in on that. >> i know we're talking about your views of ben bernanke right now. jimmy p. deserves credit. he's been writing a lot on this longer than right-leaning economists have been saying. i am a nominal gdp targeter. the one major criticism of our
7:50 pm
viewpoint is it's nearly impossible to target nominal gdp. and that's where the nominal gdp futures market comes in. >> ever since the market went haywire, that's why i like to use a basket of currencies and commodities, including gold. >> we should come back and have a longer discussion. >> i am impressed with the following. this is the reason why i've rethought my position. i'm not totally convinced of market monitoring. but the inflation that many of worry about has not come about. that's point number one. point number two, gold stopped rising quite a while ago and has been very steady at around $1,600. i'm es preimpressed with that a impressed with the fact that the dollar, king dollar has stabilized. that's why i wrote my column. i'm thrilled an important web site like business insider picked it up. jimmy p., you've been part of this thing, well done.
7:51 pm
thanks to abigail doolittle and dan greenhaus. you know what the republican party needs right now? we need a man like jack kemp, who is my great and dear friend and mentor. just listen to this and you'll see why. >> unfortunately all too many of our candidates are talking down the economy, talking down our country's ability. i represented buffalo, new york, a very heavy industrial town like buffalo and i used to go before the labor unions and say, look, your enemy is not in china or asia or japan or germany or brazil. your enemy is in washington, d.c., the terrible tax regulatory climate in this country. [ male announcer ] i've seen incredible things.
7:52 pm
otherworldly things. but there are some things i've never seen before. this ge jet engine can understand 5,000 data samples per second. which is good for business. because planes use less fuel, spend less time on the ground and more time in the air. suddenly, faraway places don't seem so...far away. ♪
7:53 pm
7:54 pm
a a politico editorial today asked a very important question for the future of the gop, where's jack kemp? it was written by my editor at the national review, rich lowrie. here's what the late jack kemp, my dear friend and mentor, told me a while back on this show. >> i think all people respect the word entrepreneur. they appreciate the risk taker, the guy or gal goes out and takes an idea out of their head and their heart and puts it into a business that adds value to our economy. >> among other things the question before the house, how can the republican party revive this entrepreneurial spirit to become the party of growth
7:55 pm
again? and i'm going to answer that in a minute. but we welcome back an old friend, director of the university of virginia center for politics. jim pethokoukis still with us, as is grover norquist. growth, opportunity, he didn't 2012 on what we used to call root canal. balancing budget is fine, getting debt down is fine but growth is the solution. i don't hear many republicans talking like that anymore. >> that's right. i loved jack kemp like you did. jack was an optimistic, upbeat person who made a point of going out and reaching out to the poor, to african-american communities, to minority communities and selling the message that the american dream was theirs, too, and then coming in with specific policies that
7:56 pm
undergerted that belief. i don't see much of that in congress. the green shade crowd is back in charge and i don't think that is very appealing to many people. they look like sour pusses. >> you're right. i can almost make a case, larry, that in the last election barack obama was the pro-growth optimist and that mitt romney was the pessimist and kemp always wand that high ground which reagan always had. the point i want to underscore that you just said and then i'll bring the others in, i knew jack, jack was such a dear friend. jack talked constantly about reaching out to minorities, empowerment zones, school choice for example, home ownership. it was jack kemp who worked with charlie rangel to create empowerment zones here in new york and elsewhere and to cut or abolish the capital gains tax to entrepreneurs. it's one of the days to this day
7:57 pm
i'm still charles errol rangel. the republican party has to get that for blacks, for minorities, for asians, prosperity for everybody of. >> instead of defending multi-millionaires, he went out to those who were poor, minorities and said i want you to be millionaires. >> it wasn't just his energy, it wasn't just his entrepreneurship, it was his message. can you almost say that message of capitalism and prosperity for everybody but especially for those that have not, jimmy. jack kemp spoke to those who have not and he spoke to people of color who have not. >> listen, there are plenty of people on the left, african-americans, they may not ultimately agree with jack kemp's policies but they did not
7:58 pm
question his sincerity that he actually cared, that year after year he was pushing it. it was a sustained effort. his message was that free market capitalism, the lack of it, that is a problem with america's cities, america's inner cities and if we can bring those sorts of market policies, let markets work, let competition, let people own their own business, let people build assets. that is the path to prosperity and that's what we need to hear a lot more of from washington. >> grover norquists are one of the things i'll never forget, jack was working with an hispanic group on empowerment zones but he wanted the empowerment zone to be tax free, capital gains tax free. he sent me to a bunch of meetings with people i had never met before but we had this common ground to provide opportunity, tax-free opportunity for hispanics who need it, grover. there isn't anybody in the gop that has that message.
7:59 pm
>> i would argue there's a spark of jack kemp in paul ryan, in marco rubio, in bobby jindal. jack kemp lives in the hearts of progressive republicans. >> larry sabato, last word. >> the republicans need jack kemps of all genders. >> we all need more time. we'll do another jack kemp segment. that's it for tonight's show. thanks for watching. boy do i miss jack kemp.


disc Borrow a DVD of this show
info Stream Only

Uploaded by TV Archive on